Correlation Between ALD SA and Exail Technologies
Can any of the company-specific risk be diversified away by investing in both ALD SA and Exail Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ALD SA and Exail Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALD SA and Exail Technologies SA, you can compare the effects of market volatilities on ALD SA and Exail Technologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ALD SA with a short position of Exail Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALD SA and Exail Technologies.
Diversification Opportunities for ALD SA and Exail Technologies
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ALD and Exail is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding ALD SA and Exail Technologies SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exail Technologies and ALD SA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ALD SA are associated (or correlated) with Exail Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exail Technologies has no effect on the direction of ALD SA i.e., ALD SA and Exail Technologies go up and down completely randomly.
Pair Corralation between ALD SA and Exail Technologies
Assuming the 90 days trading horizon ALD SA is expected to generate 1.41 times more return on investment than Exail Technologies. However, ALD SA is 1.41 times more volatile than Exail Technologies SA. It trades about 0.05 of its potential returns per unit of risk. Exail Technologies SA is currently generating about 0.07 per unit of risk. If you would invest 624.00 in ALD SA on October 25, 2024 and sell it today you would earn a total of 78.00 from holding ALD SA or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALD SA vs. Exail Technologies SA
Performance |
| Timeline |
| ALD SA |
| Exail Technologies |
ALD SA and Exail Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALD SA and Exail Technologies
The main advantage of trading using opposite ALD SA and Exail Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALD SA position performs unexpectedly, Exail Technologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Exail Technologies will offset losses from the drop in Exail Technologies' long position.| ALD SA vs. Gaztransport Technigaz SAS | ALD SA vs. Union Technologies Informatique | ALD SA vs. Affluent Medical SAS | ALD SA vs. Sartorius Stedim Biotech |
| Exail Technologies vs. Technip Energies BV | Exail Technologies vs. Netmedia Group SA | Exail Technologies vs. Jacquet Metal Service | Exail Technologies vs. Aures Technologies SA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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